Jeff Buick‘s Trishield Capital Management recently submitted its 13F filing with the U.S. Securities and Exchange Commission for the quarterly period ended March 31. The filing indicated that the fund had $112.71 million worth of holdings in its public equity portfolio value, an uptick of $36.98 million from the previous filing period. The Manhattan, New York-based hedge fund had $207 million in assets under management. Trishield Capital Management mainly focuses on distressed, special, and event-driven investment opportunities. Based on the hedge fund’s investment strategy, Insider Monkey has been keenly following its activities and in this article we’ll unveil the fund’s top three small-cap picks heading into the second quarter. The three companies in question are Oasis Petroleum Inc. (NYSE:OAS), BlackBerry Ltd (NASDAQ:BBRY), and Rosetta Resources Inc. (NASDAQ:ROSE).
Before looking into these three stocks, it’s important to shed a little light on why more investors are including small-cap picks in their investment portfolios and why we are encouraging investors to do so, when done properly. According to our research into the performance of the 15 most popular small-cap picks of hedge funds between 1999 and 2012, it became apparent that these stocks outdo the S&P 500 Total Return Index, having done so by one percentage point per month on average over the course of that period. We launched our flagship small-cap strategy in August 2012 based on this compelling research and it has not disappointed us or its investors since, returning over 142% since then and blasting the market by more than 84 percentage points (more details here).
As of the most recent 13F reporting period, Trishield Capital Management holds a total of 553,586 shares of Oasis Petroleum Inc. (NYSE:OAS), with a market value of $7.87 million. The dynamics in the energy sector have seen the stock generate widespread interest, including from Trishield, for whom the stock was a new pick. Wall Street analysts have given the stock a consensus rating of 2.21, meaning the stock ranks as a solid “Buy” candidate. The company posted $0.28 in earnings per share in its most recent earnings report, beating estimates by $0.01. However, the company recorded revenue of $180.40 million, well short of analysts’ expectations of $262.10 million. Compared to the corresponding quarter last year, the revenue represented a steep decline of 44%. TheStreet Ratings recently gave the stock a “hold” rating, citing a number of factors, some of which show strengths while others show weaknesses. Strengths include expanding profit margins and healthy valuation status while the negative traits are worsening net income, weaker cash flow, and poor return-on-equity. During the quarter, a number of hedge funds had interest in the stock, including John Scully‘s SPO Advisory Corp, which held a total of 20.37 million shares of the firm, having upped its position from 7.73 million. A few others are billionaire John Paulson’s Paulson & Co, D E Shaw, and David Costen Haley’s HBK Investments. During the quarter, a total of 32 hedge funds out of the 730 we monitor had investments in the stock.